What happens when third party cookies disappear?

Kristin Luck, president of ESOMAR and founder of ScaleHouse, Alexandre Guerin, CEO of Ipsos in France, and George Slefo, senior editor at the Trade Desk discuss the future of advertising in the absence of third party cookies.

The ‘Great Cookie Crumble’ began in 2020, when third-party cookies were phased out for the majority of mainstream web browsers (Safari, Firefox, Edge and Brave). Now that Google has planned to discontinue third-party tracking on Chrome by 2022, what does this mean for online advertising?

For starters, Kristin Luck, president of ESOMAR (the European Society for Opinion and Marketing Research) and founder of ScaleHouse, said we need to look at the context in which this happened.

“I think the landscape of cookies, as it stands today, is really different than when it first started. Originally, cookies were designed for individual websites to be able to track information, and to be able to offer more relevant products and services and gather data on that singular website,” she explained.

A right to privacy

“How that’s changed over time is that your identity is being tracked over multiple websites. Your behaviours are being tracked across every website that you’re using on the internet, and people have varying levels of tolerance and a right to privacy.”

To illustrate the reach that cookies can have – reach that you may not want them to have – Kristin gave the example of internet usage patterns during the Covid-19 pandemic in 2020.

“One of the big winners of online browsing has been PornHub. They went to around 19 million users in two days, and now 120 million people a day are accessing PornHub. And so you think you want all your activity tracked across all your browsers? I would keep that in the back of your mind as an example of the power of cookies,” she wryly observed.

Time for something better

Stepping back and realising that third-party cookies are not just bad for online privacy, but that they were also designed for an entirely different job (they were created by Netscape engineers to keep track of what online shoppers left in their trolleys), perhaps it’s time to seriously consider alternatives.

“I think there’s a wonderful opportunity to do a better job at this targeting. We need to find ways to better track that across platforms; across screens. What we’re seeing when I speak to clients, which are all the biggest advertisers in the world, is there are two things that are missing in the digital ad space,” said Alexandre Guerin, CEO of Ipsos in France.

“One is the power of creative, which isn’t as thorough as on other channels. And two, the companies already have a mass of consumer understanding, and it’s very difficult to combine that with an actual ad-targeting strategy or digital activation strategy. Bringing the two together is probably the way to go to drive more engagement.”

And this space is already filling up rapidly. Data analytics companies are using novel ways to build consumer profiles in an ethical manner that respects privacy.

The rise of data as a service

“This is, in part, why we’re seeing the rise of these data as a service (DaaS) companies,” observes Kristin.

“You’ve got companies like Distillery – which is building audience profiles – providing a more comprehensive landscape of consumer behaviours that goes beyond what you could normally get with cookies because they’re using predictive modelling techniques.”

There are also startups, including HyphaMetrics, that are touting what is known as zero party data. And all of these solutions, said Kristin, will actually enhance what advertisers are able to do, rather than play second fiddle to cookies.

Why the love affair with cookies?

“One of the reasons cookies worked in digital advertising for so long is because they were a neutral currency. No one owned them,” explained George Slefo, senior editor at The Trade Desk.

“What we’re seeing right now with the looming death of third-party cookies is you have a bunch of these companies, all racing to make their own identity solutions and some of them are proprietary.

“In other words, they want to make a little bit of money off of creating the next identity solution, which kind of invites the question, ‘Is there going to be one identity solution to rule them all?’.”

Kristin and Alexandre don’t think so. With GDPR and regulations differing by country – and, in the case of the US, often by state – this will not be a one-size-fits-all market. There will probably be a hundred more Distillerys and HyphaMetrics in this brave new world of digital advertising.

Main image: Web Summit